Conset to let from Lender

laughingBudha

Hi,
We are currently on a fixed rate Resident mortgage with Yorkshire Building Society and it is due to end in Jul 2020. We moved our DS to a school a bit far away and daily commuting for the school run is causing us a lot of stress.
We now want to move to the area where we can walk to my DS's school. In order to do that, I believe we need to get a "Consent-to-let" from the current lender in order rent our current property and move to another rented accomodation.
My question is, has anyone got experience with YBS in terms of Consent-to-let? Or any ideas around this would be really helpful.

Caz3121

do you want to be a landlord?
consent to let is often a short term solution....when would you be planning to return to your property?
why not sell and buy in new area?

Mortgage_Expert

Hi laughingBudha, as a broker I deal with the intermediary (mortgage broker) arm of Yorkshire BS, which is Accord Mortgages. As a lender they do consider consent-to-let applications, so they are not a lender who "just says no", so good news in this regard. However you would need to consult with them direct so that they can make a decision on the individual merits of your case. Just be honest with them and explain that you are exploring the possibility, and the reasons, and someone there will be able to give you an indication of what can be done. If they do grant you CTL you may possibly have the following conditions (but not as a matter of fact) (1) an interest rate premium applied to your mortgage account (2) a time limit on the CTL for it to come to an end or to be reassessed. I hope this helps, and best of luck

laughingBudha

hi Caz3121, if we were to move, if would be definitely for good 2 years from now.

The area we would like to move to is very expensive. Also, we might want to move back to our current home after 2 years, so no ideas to sell it.

laughingBudha

Thank you so much for the response @Mortgage Expert. This is the exact advice I was looking for. I do understand your point number (1), but struggle to understand point (2) for my case.

My current mortgage fixed rate ends June 2020.

Even if YBS says yes and apply an interest rate premium, I believe, that is only applicable until June 2020, right?

When I go for remortgage in June 2020, I presume, I need to look for a "Buy to let" deals with a different lender, since YBS don't do "Buy to let" mortgages.

Mortgage_Expert

Hi laughingBudha, if you are going to be away from your current home for 2 years, my opinion is that you would need to eventually exit your Consent-to-let mortgage with Yorskshire BS (assuming they grant it) and move on to a Buy-To-Let mortgage. This would only be possible if the rental income meets with the required lender SICR (stressed income cover ratio) among other criteria factors. Some BTL lenders do not lend to landlords who don't own their main residence. However, a healthy proportion of lenders do indeed lend to landlords who rent their own home.

Mortgage_Expert

Hi laughingBudha, you are indeed correct. Your current deal with YBS ends in June 2020 so any redemption penalties associated to this mortgage will drop off (assuming there is no redemption penalty overhang, which isn't common these days) allowing you to move to a BTL mortgage. Assuming you let the property immediately, by June next year you should have enough rental income history to be classed as an "experienced landlord", for BTL lenders to be interested in you.They usually like to see 6 months rental history. Once you have this "experience" you will qualify (in this regard) for a wider range of lenders. In terms of point (2) Accord may put a 6 month limit on your CTL permission, or something similar, but in fact I just don't know what it would be, or if they would actually impose a time limit at all. This is why you need to consult with them, but hopefully you are understanding the general principals of your situation and what you need to do.

Mortgage_Expert

Hi laughingBudha, as an addendum, it is absolutely vital that you plan your exit from your current mortgage to your new BTL mortgage. Bear in mind (1) the BTL mortgage market comes to life at 75% LTV, where you have access to a wide range of lenders (2) the property needs to have a rental income valued at a level that will meet the SICR, which differs between lenders (3) the property needs to meet requirements with regards to energy rating and other relevant matters. The above isn't exhaustive, but I think you get my point that you need to plan diligently. Otherwise you could get in to a bit of a pickle, so to speak.

laughingBudha

Hi Mortgage Expert, as per LTV point of view, we are in good position atm. We have an outstanding 60% LTV on mortgage with YBS.
Thanks for all the valuable advice you provided. I will speak to YBS and post here how it went.

The only risk I am seeing here is, once I approach YBS to get "Conset to let", they can definitely sense that I won't be their future customer after June 2020, as I have to go for a BTL mortgage and YBS don't do them.

Mortgage_Expert

Hi laughingBudha, 60% LTV is certainly an advantage. Don't worry about how they perceive you as a future customer. It serves a lender to be helpful in the long term, and as you would expect, they will likely make money from granting CTL via a one-off charge and/or rate a rate increase. They do also do BTL via their broker arm, Accord Mortgages. Yes, let me know how it goes.

Donnie2019

My ex she just took no notice and does huge amount of air bnb and booking.com bnb too. Santander never found out yet although as she is dicking about with trying to get a settlement , like eight years, I am thinking of reporting her. That of course would be reporting myself but it’s rempting just to bring it to a head. My point being , lots of folk just ge5 away with it